Robots Are Us: Some Economics of Human Replacement

Will smart machines replace humans like the internal combustion engine replaced horses? If so, can putting people out of work, or at least good work, also put the economy out of business? Our model says yes. Under the right conditions, more supply produces less demand as the smart machines undermine their customer base. Highly tailored policies can keep smart machines from immiserating humanity, but spreading the wealth – the knowledge wealth – by mandating open-source technology does not appear on the list.